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What's in Store for These 4 MedTech Stocks in Q2 Earnings?
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With the second-quarter earnings season in full swing, it's going to be a pivotal week for numerous firms within the medical device sector. The latest Earnings Preview report indicates strong earnings and revenue growth within the Medical sector. The top and bottom-line improvements are likely to have been due to sustained demand for medical products and services and favorable pricing strategies, which might have offset the burden of increased costs and interest expenses stemming from worldwide geopolitical issues and healthcare labor shortages.
Going by the broader Medical sector’s scorecard, 16.9% of the companies in the Medical sector, constituting 33.8% of the sector’s market capitalization, reported earnings till Jul 24. Of these, 100% beat on both earnings and revenues. The bottom line rose 4.2% year over year on 2.6% higher revenues.
Overall, second-quarter earnings of the Medical sector are expected to improve 19.4% on 7.3% growth in revenues. This compares with the first-quarter earnings decline of 24% on revenue growth of 6.8%.
Some major industry players like Laboratory Corporation of America Holdings or Labcorp (LH - Free Report) , Bio-Rad Laboratories (BIO - Free Report) , Teleflex (TFX - Free Report) and Bruker (BRKR - Free Report) are set to report their quarterly results tomorrow.
Factors Driving MedTechs This Earnings Season
Replicating the broader market trend, MedTech or the Zacks-defined Medical Productscompanies’ collective business growth in the second quarter is likely to have stabilized. The industry has been experiencing rapid adoption of generative Artificial Intelligence (genAI) and digital therapies, which market observers predict will take the healthcare business by storm.
Macro trends that have set the stage for even more innovation and investment in this space are an aging population, growing healthcare awareness and increasing access to better health options. Favorable impacts from these are expected to be seen in the second-quarter results.
However, the industry has been grappling with issues in the form of staffing shortages and a significant surge in medical supply expenses. In addition, medical procedure rates and demand for the company’s products continue to fluctuate as the medical system rebalances its infrastructure and resources in a post-COVID-19 market. These have been putting significant pressure on the margins of medical device companies. Further, the worsening geopolitical environment leading to supply chain bottlenecks has resulted in high freight and raw material costs.
Also, diagnostic testing companies have been witnessing a severe year-over-year decline in testing demand, compared to strong demand in the year-ago period for COVID-19 testing products.
MedTech Stocks to Watch
Labcorp: In the second quarter of 2024, both its Diagnostic Laboratories (Dx) and Biopharma Laboratory Services segments are likely to have delivered a robust performance, driving the company’s top-line growth. Biopharma may have benefited from the continued strength of its largest component, the Central Laboratories business.
Within Dx, Labcorp’s status as a preferred partner for health systems and regional local laboratories is expected to have helped advance its strategic priorities. The company may have continued leveraging science, technology and innovation to bring new test services and capabilities to its customers. However, similar to the last few quarters, this quarter too, the company might have experienced a significant decline in COVID-19 testing volumes, denting the company’s overall performance. (Read more: Here's How Labcorp is Placed Ahead of Q2 Earnings Release)
The Zacks Consensus Estimate for Labcorp’s second-quarter 2024 revenues is pegged at $3.20 billion. This suggests a 5.4% rise from the year-ago reported figure. The estimate for its second-quarter 2024 EPS of $3.78 indicates a 10.5% improvement from the 2023 comparable figure.
During the quarter, the company’s shares declined 5.9% compared with the industry’s 5.7% decline.
Per our proven model, a stock with the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating on earnings. However, this is not the case here, as you can see below.
LH has an Earnings ESP of -2.28% and a Zacks Rank of 4 (Sell) at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Bio-Rad: The ongoing weakness in the biotech and biopharma end markets has been severely impacting sales of Bio-Rad’s Life Science tools and bioprocessing products. This is likely to have impeded the company’s Life Science business growth in the second quarter as well. Bio-Rad has also been experiencing weaker demand in China as a result of the macroeconomic environment and the local made-in-China initiatives, which are likely to have dented the company’s growth. Meanwhile, the Life Science segment is likely to have witnessed demand for the Droplet Digital PCR platform in the second quarter, banking on two recent deals. (Read more: Bio-Rad to Report Q2 Earnings: What's in the Cards?)
The Zacks Consensus Estimate for Bio-Rad’s second-quarter 2024 revenues is pegged at $648.6 million, suggesting a fall of 4.8% from the year-ago reported figure. The Zacks Consensus Estimate for second-quarter 2024 EPS of $2.12 indicates a year-over-year decline of 29.3%.
During the second quarter, the stock plunged 19.5% compared with the industry’s 3.4% decline.
BIO has an Earnings ESP of 0.00% and a Zacks Rank #2 at present.
Teleflex: During the second quarter of 2024, it is expected to have gained from balanced performance across its diversified portfolio and global business units. Urolift, once again, is expected to report consistent growth in the hospital setting. In the Vascular business, underlying PICC growth is expected to have remained strong, while new products are likely to have helped capture shares in peripheral access markets. Teleflex’s Asia expansion efforts might have contributed to the top line in the second quarter.
The Zacks Consensus Estimate for the company’s second-quarter total revenues is pegged at $736.4 million, indicating a 2.7% rise from the prior-year quarter’s reported figure. The consensus mark for earnings is pegged at $3.33 per share, indicating a 2.4% decline from the year-ago quarter’s reported actuals.
Meanwhile, during the second quarter, shares of the company lost 5.6% compared with the industry’s 1.6% drop.
TFX has an Earnings ESP of -0.66% and a Zacks Rank #3 at present.
Bruker: The second quarter of 2024 is expected to have witnessed strong growth from Bruker’s BSI Nano Group, banking on consistent revenue growth across its end markets, including academic, government, industrial, and semiconductor metrology.
Particularly, NANO surface division and advanced X-ray and core tools are expected to have contributed to the top line. Further, the CALID group too might have gained from the strong demand for differentiated instruments, particularly in life science mass spectrometry proteomics solutions and optics spectroscopy and microscopy instruments. However, continued volatility in global financial markets has been preventing Bruker’s customers from obtaining adequate financing for their operations and proceeding with capital spending initiatives. This may have resulted in a drop in sales volume.
The Zacks Consensus Estimate for the company’s second-quarter 2024 revenues is pegged at $796.2 million, implying a 16.8% improvement from the prior-year quarter’s reported figure. The consensus mark for earnings is pegged at 52 cents per share, 4% higher than the year-ago quarter’s reported numbers.
In the second quarter of 2024, shares of the company lost 31.3% compared with the industry’s 7.2% decline.
BRKR has an Earnings ESP of -0.88% and a Zacks Rank #3 at present.
Image: Bigstock
What's in Store for These 4 MedTech Stocks in Q2 Earnings?
With the second-quarter earnings season in full swing, it's going to be a pivotal week for numerous firms within the medical device sector. The latest Earnings Preview report indicates strong earnings and revenue growth within the Medical sector. The top and bottom-line improvements are likely to have been due to sustained demand for medical products and services and favorable pricing strategies, which might have offset the burden of increased costs and interest expenses stemming from worldwide geopolitical issues and healthcare labor shortages.
Going by the broader Medical sector’s scorecard, 16.9% of the companies in the Medical sector, constituting 33.8% of the sector’s market capitalization, reported earnings till Jul 24. Of these, 100% beat on both earnings and revenues. The bottom line rose 4.2% year over year on 2.6% higher revenues.
Overall, second-quarter earnings of the Medical sector are expected to improve 19.4% on 7.3% growth in revenues. This compares with the first-quarter earnings decline of 24% on revenue growth of 6.8%.
Some major industry players like Laboratory Corporation of America Holdings or Labcorp (LH - Free Report) , Bio-Rad Laboratories (BIO - Free Report) , Teleflex (TFX - Free Report) and Bruker (BRKR - Free Report) are set to report their quarterly results tomorrow.
Factors Driving MedTechs This Earnings Season
Replicating the broader market trend, MedTech or the Zacks-defined Medical Productscompanies’ collective business growth in the second quarter is likely to have stabilized. The industry has been experiencing rapid adoption of generative Artificial Intelligence (genAI) and digital therapies, which market observers predict will take the healthcare business by storm.
Macro trends that have set the stage for even more innovation and investment in this space are an aging population, growing healthcare awareness and increasing access to better health options. Favorable impacts from these are expected to be seen in the second-quarter results.
However, the industry has been grappling with issues in the form of staffing shortages and a significant surge in medical supply expenses. In addition, medical procedure rates and demand for the company’s products continue to fluctuate as the medical system rebalances its infrastructure and resources in a post-COVID-19 market. These have been putting significant pressure on the margins of medical device companies. Further, the worsening geopolitical environment leading to supply chain bottlenecks has resulted in high freight and raw material costs.
Also, diagnostic testing companies have been witnessing a severe year-over-year decline in testing demand, compared to strong demand in the year-ago period for COVID-19 testing products.
MedTech Stocks to Watch
Labcorp: In the second quarter of 2024, both its Diagnostic Laboratories (Dx) and Biopharma Laboratory Services segments are likely to have delivered a robust performance, driving the company’s top-line growth. Biopharma may have benefited from the continued strength of its largest component, the Central Laboratories business.
Within Dx, Labcorp’s status as a preferred partner for health systems and regional local laboratories is expected to have helped advance its strategic priorities. The company may have continued leveraging science, technology and innovation to bring new test services and capabilities to its customers. However, similar to the last few quarters, this quarter too, the company might have experienced a significant decline in COVID-19 testing volumes, denting the company’s overall performance. (Read more: Here's How Labcorp is Placed Ahead of Q2 Earnings Release)
The Zacks Consensus Estimate for Labcorp’s second-quarter 2024 revenues is pegged at $3.20 billion. This suggests a 5.4% rise from the year-ago reported figure. The estimate for its second-quarter 2024 EPS of $3.78 indicates a 10.5% improvement from the 2023 comparable figure.
During the quarter, the company’s shares declined 5.9% compared with the industry’s 5.7% decline.
Per our proven model, a stock with the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating on earnings. However, this is not the case here, as you can see below.
LH has an Earnings ESP of -2.28% and a Zacks Rank of 4 (Sell) at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Labcorp Price and EPS Surprise
Labcorp price-eps-surprise | Labcorp Quote
Bio-Rad: The ongoing weakness in the biotech and biopharma end markets has been severely impacting sales of Bio-Rad’s Life Science tools and bioprocessing products. This is likely to have impeded the company’s Life Science business growth in the second quarter as well. Bio-Rad has also been experiencing weaker demand in China as a result of the macroeconomic environment and the local made-in-China initiatives, which are likely to have dented the company’s growth. Meanwhile, the Life Science segment is likely to have witnessed demand for the Droplet Digital PCR platform in the second quarter, banking on two recent deals. (Read more: Bio-Rad to Report Q2 Earnings: What's in the Cards?)
The Zacks Consensus Estimate for Bio-Rad’s second-quarter 2024 revenues is pegged at $648.6 million, suggesting a fall of 4.8% from the year-ago reported figure. The Zacks Consensus Estimate for second-quarter 2024 EPS of $2.12 indicates a year-over-year decline of 29.3%.
During the second quarter, the stock plunged 19.5% compared with the industry’s 3.4% decline.
BIO has an Earnings ESP of 0.00% and a Zacks Rank #2 at present.
Bio-Rad Laboratories, Inc. Price and EPS Surprise
Bio-Rad Laboratories, Inc. price-eps-surprise | Bio-Rad Laboratories, Inc. Quote
Teleflex: During the second quarter of 2024, it is expected to have gained from balanced performance across its diversified portfolio and global business units. Urolift, once again, is expected to report consistent growth in the hospital setting. In the Vascular business, underlying PICC growth is expected to have remained strong, while new products are likely to have helped capture shares in peripheral access markets. Teleflex’s Asia expansion efforts might have contributed to the top line in the second quarter.
The Zacks Consensus Estimate for the company’s second-quarter total revenues is pegged at $736.4 million, indicating a 2.7% rise from the prior-year quarter’s reported figure. The consensus mark for earnings is pegged at $3.33 per share, indicating a 2.4% decline from the year-ago quarter’s reported actuals.
Meanwhile, during the second quarter, shares of the company lost 5.6% compared with the industry’s 1.6% drop.
TFX has an Earnings ESP of -0.66% and a Zacks Rank #3 at present.
Teleflex Incorporated Price and EPS Surprise
Teleflex Incorporated price-eps-surprise | Teleflex Incorporated Quote
Bruker: The second quarter of 2024 is expected to have witnessed strong growth from Bruker’s BSI Nano Group, banking on consistent revenue growth across its end markets, including academic, government, industrial, and semiconductor metrology.
Particularly, NANO surface division and advanced X-ray and core tools are expected to have contributed to the top line. Further, the CALID group too might have gained from the strong demand for differentiated instruments, particularly in life science mass spectrometry proteomics solutions and optics spectroscopy and microscopy instruments. However, continued volatility in global financial markets has been preventing Bruker’s customers from obtaining adequate financing for their operations and proceeding with capital spending initiatives. This may have resulted in a drop in sales volume.
The Zacks Consensus Estimate for the company’s second-quarter 2024 revenues is pegged at $796.2 million, implying a 16.8% improvement from the prior-year quarter’s reported figure. The consensus mark for earnings is pegged at 52 cents per share, 4% higher than the year-ago quarter’s reported numbers.
In the second quarter of 2024, shares of the company lost 31.3% compared with the industry’s 7.2% decline.
BRKR has an Earnings ESP of -0.88% and a Zacks Rank #3 at present.
Bruker Corporation Price and EPS Surprise
Bruker Corporation price-eps-surprise | Bruker Corporation Quote
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